Reviewed by Harvey Mann Brock University
In this slim volume, Johnson introduces us to the undistin-guished beginnings of the DuPont business dynasty. In the In-troduction to the book, we meet the grandfather, Samuel, and the father, Pierre, of Eleuthere Irenee DuPont de Nemours (hereafter E. I.) and learn a little about their lives in France. It is Pierre who makes the decision to emigrate to America, influenced by the turmoil of the French Revolution and his peripheral involvement therein. This move, however, seems to have been made without form or serious plan and with hardly any capital. Pierre formed a company and, as part of his plan, he gave E. I. the responsibility of establishing a gunpowder manufacturing facility. E. I. had developed an interest in gunpowder as a teenager and learned more about it over time. Finally, early in 1801 a “Deed of Association” was drafted and the very poorly financed company came into existence. It can be noted that this company was the only successful, albeit, very successful, venture of the DuPont family.
The first bookkeepers of the company are introduced in Chapter 1. Peter Bauduy has the dubious distinction of being the first (due less to his prowess with the books than to his being a shareholder in the company). He is replaced early in 1806 by Raphael Duplanty, who seems to have been familiar with double-entry bookkeeping and also had some practical experience. In the balance of this chapter, two contemporary bookkeeping texts are quoted; however, I found the comparison between these quotes and the books of the copany confusing, to say the least. There are, however, details of the early DuPont records available in the Hagley Library and Museum in Greenville, Delaware.
The emphasis in the second chapter is on the initial capi-talization, or rather the lack of same, of the firm. The process is difficult to follow since most of the shares in the company were not purchased for cash, the record keeping was horrendous, and the interrelationships of the company, the father’s company and the shareholders were quite confusing. The company survived in spite of these tribulations due to a provident loan as well as the intervention of a dissatisfied Bauduy, who eventually departed. This leads to Chapter 3 and a consideration of the importance of cash and cash flows to the operation of the business in the early 19th century. Very little that is unusual is introduced. A few journal entries are shown with an emphasis on bills payable or receivable and very little actual cash being exchanged.
Chapter 4 offers a short recapitulation of the accrual ac-counting used by DuPont, but does not introduce any new con-cepts or ideas. This leads to the final chapter where it is con-cluded that the company had the record keeping it needed to survive. Mention is made of “work-in-progress” inventory and a writing-down of fixed assets akin to, but not as systematic as, depreciation accounting. It is pointed out that the books were not closed annually but this is excused because of the difficulty of obtaining the required information from agents across the country. In a final warning to the reader, Johnson indicates that any conclusions drawn are firm specific and cannot be generalized to other companies.
The book would benefit from a comparison with account-ing practices of like, or even unlike, businesses of the same era. We do, however, now know a lot more about the early book-keeping practices of the DuPont enterprise and also about a treasure trove of data available for further research at the mu-seum in Greenville.
